Italtile reinstates R800m worth of expansion projects
By Sandile Mchunu 24m ago
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DURBAN – ITALTILE – whose brands include CTM, Italtile Retail, TopT and U-Light – has reinstated R800 million worth of expansion capital projects that were temporarily deferred due to the lockdown and trading restrictions in the first half of the 2020 financial year.
As a result, the group said yesterday it had incurred R359m of capital expenditure in the six months to the end of December, up from R340m compared with last year.
Chief executive Jan Potgieter said the group would continue to roll out capital expenditure projects, with R450m committed for the second half of the 2021 financial year, and would open new stores where proven demand existed.
“These projects include the commissioning of revolutionary technology and equipment in the Samca floor tile factory; relocation of Ezee Tile’s primary manufacturing facility to a new owned-site; the construction of a new fully automated dark warehouse for Betta sanitaryware, which will resolve capacity constraints; and development of a retail store node in Boksburg, which will feature all of the group’s retail brands,” Potgieter said.
The group declared a dividend of 31 cents, up by 35 percent compared with a year earlier.
The expansion projects come after Italtile reported a double-digit growth in earnings in its half-year results, with trading profit up by 38 percent to R1.4 billion and adjusted headline earnings per share increasing by 32 percent to 77.1c a share.
Its system-wide turnover rose by 14 percent to R6.2bn, and its retail store turnover increased by 17 percent, with average selling price inflation estimated at 6 percent, and like-forlike retail store turnover improved by 15 percent.
Italtile consists of retail brands, supply chain importers and manufacturing businesses.
Its retail brands are represented through a total network of 203 stores, including six online webstores.
In the supply chain, Italtile grew sales by 25 percent and manufacturing sales rose by 18 percent.
Potgieter said the performance was rewarding given the difficult trading conditions where Covid-19 led to a temporary closure to some of its stores.
“It is rewarding to report that, despite the unprecedented trading environment, the group has delivered a pleasing performance for the review period, recording double-digit sales and profit growth across all of our operations,” he said.
The group attributed the performance particularly to four key factors, which included the response of its team to adjusting to the new normal.
Looking ahead, Potgieter said the management was optimistic about the group’s growth prospects, and the firm had developed strategies to optimise on opportunities presented.
“Under current trading conditions and Covid-19 related restrictions, we anticipate that the group will deliver double-digit sales and profit growth for the forthcoming six months. However, should conditions deteriorate and/ or trading restrictions be intensified resulting in an adverse impact on our operations, this guidance will no longer apply,” he said.
Italtile shares closed 3.87 percent lower at R17.40 yesterday.